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Spotify to show whether investors believe in music's resurgence

Posted on Sunday, January 07, 2018 by Gina Adkins

Spotify to show whether investors believe in music's resurgence

The company is now being sued in a $1.6bn lawsuit by Wixen Music Publishing, which accuses Spotify of failing to pay mechanical licenses for songs on its service in the US.

Spotify's Chief Content Officer, Stefan Blom, is leaving the streaming company in the coming weeks - amid the firm's attempt to list on the New York Stock Exchange.

The company has been gearing up for the process for years, and in 2017 renewed its licensing deals with all three major labels and the independent-label collective Merlin. "But Spotify failed to obtain either license type", and instead outsourced that role to the Harry Fox Agency, which the suit says "Spotify knew ... did not possess the infrastructure to obtain the required mechanical licenses and Spotify knew it lacked these licenses".

It was recently learned that Wixen Music Publishing filed a case in California against the Sweden-based music streaming giant. Wixen's claim basically stated that Spotify did not have all the correct licenses to stream certain songs. Other musicians signed under Wixen include Missy Elliot, Janis Joplin, and The Beach Boys.

A rep for Spotify declined Variety's request for comment.

The suit, which alleges that Spotify is using thousands of songs without a proper license, was filed on December 29 in California federal court. In its lawsuit, it said its songs have been downloaded or streamed billions of times through Spotify and that it received no revenue for that.

Last year, the executive helped Spotify secure critical licenses with the big music labels that paved the way for the company's IPO. The settlement has yet to be finalized; if it goes through, the $43.4 million will go into a fund to compensate rights holders for past infringement.